The other day, my auto insurance policy came up for renewal and it jumped by something like 25% despite a clean record. So I called my insurance planner and asked for some alternatives. I used to pay by the month, mostly out of habit from when I was young and didn’t have cash for a year or even multiple months of insurance at a time. When I looked a the quotes, though, I was amazed just how much more expensive it is. I guess I shouldn’t be surprised, but on the new policy shown above (for a ‘13 Outback and ‘14 Forester), I’d be paying $127 per year more just to pay by the month. If I put that payment on a card instead of a bank draft, throw on another $36. Or if I pay every six months, it’s only about $11 more than paying for the full year. Fortunately, I can afford it now, so I’m paid up through May 2018 and basically saving 2 oil changes. But it got me thinking... how do others do this? I realize that for a lot of folks, shelling out for a year at once is a pretty big chunk of change, so I don’t hold it against anyone that does. But basically you’re paying a finance charge if you do. Or maybe it varies by company? I really haven’t shopped around enough to even know if every insurance company has a similar gap between paying monthly and annually. Or, heck, if all insurance companies even offer all of these payment options.